An Ontario Superior Court ruling has found a developer acted in bad faith in refusing to accept evidence that would satisfy financing conditions in a presale condominium contract, setting a new precedent that could help tilt the balance of power toward new-home buyers and away from developers.
“Every time we came back they had a different reason, they kept changing their story,” Ms. Ania said. “We even passed the stress test! They denied that, they wanted us to sell our house and have the cash on hand to pay in order to get approved.” Litigation began in October, 2018, and at one point Hi-Rise chief executive Warren Green was asked why he wouldn’t co-operate with the purchasers attempts to prove their ability to pay. “I don’t have to,” said Mr. Green, according to the court transcript. Mr. Green is a retired lawyer who has partnered with other developers to build condo projects in Hamilton and Toronto’s Yorkville neighbourhood.
“They had no right to terminate [under Tarion Home Warranty program] for a decision to change the use,” said Audrey Loeb, partner at Shilby Righten, LLP, who has long argued for the provincial government to enshrine “good faith” language into pre-construction contracts. To her it seems the developer wanted to be able to find the purchaser in default rather than cancel the building: “They had no right to cancel except for being unable to secure financing,” she said.
Hi-Rise said Mr. Green was out of the country and did not provide any other comment on the case at press time.